Help Wanted: Software CFO's in Climate

The CFO position is the most undervalued executive position by startup CEOs. I made the same wrong assumption as a startup leader early in my career too.

But, given the amount of funding that has gone into climate tech over the past 2 years, the complexity of those businesses, and the current fundraising environment, climate tech CEOs would be wise to invest in the position sooner rather than later.

A great CFO will separate you from the crowd.

A great CFO will inform important strategic and operational decisions; find new insights to improve business performance; and ideally, make all things capital markets easier.

A great CFO will make you more attractive to potential buyers, or that IPO you dream of.

So when should you begin to consider making this crucial hire for your executive team?

Bessemer Venture Partners recently conducted a survey with an executive search firm that highlighted when most high-growth startups hire their first CFO.

Here are the median data from that survey:

• # of employees: 100
• Revenue ($M): $25
• Revenue Growth Rate: 100%
• CFO equity: 1.0%

The vast majority hire between 60 and 100 employees and before hitting $40M in annual revenue.

If climate companies mature at the expected rate from funding over the last 24 months, the number of companies that fit this median profile will only continue to grow between now and the end of 2024.

A good finance executive almost always pays for themselves immediately, whether it’s through fundraising, optimized spending, cash flow, or more revenue due to key insights.

One of my favorite public examples of how a good CFO can be a differentiator comes from a recent article on Salesforce’s layoff earlier this year.

There’s little doubt that at a company of this size, the finance organization worked in tandem with sales leaders. But, this is the type of insight a great CFO will deliver to a fast-growing startup with limited resources. CEOs should have these insights at their fingertips to make tough, but ultimately healthy decisions for their business.

When a CEO hires the right person and empowers them to do their job well, great things ensue — profitability improves, fundraising gets easier, financial processes get tighter, resource allocation gets more strategic, and forecasting improves… the business gets healthier.

When climate tech businesses get healthier, so does the financing market for them, and so does the environment as a result of their work. A win-win-win for us all.

If you’re an experienced financial executive looking to make the jump to climate, please reach out to me! I’d love to connect and help you join the sustainability movement.

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